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General Motors Acceptance Corporation

GMAC Reaches Agreement to Sell 60 Percent Stake in Commercial Mortgage Business to KKR, Five Mile Capital, Goldman Sachs Capital Partners

Detroit (ots/PRNewswire)

General Motors Acceptance Corporation
(GMAC), the financial services subsidiary of General Motors
Corporation (NYSE: GM), announced today that it has entered into a
definitive agreement to sell a 60 percent equity interest in its
commercial mortgage subsidiary, GMAC Commercial Holding Corp.
(GMACCH) to an investor group comprising Kohlberg Kravis Roberts &
Co. (KKR), Five Mile Capital Partners, and Goldman Sachs Capital
Partners.
GMAC will continue to hold a 40 percent equity interest in GMACCH,
a leader in commercial real estate loan origination, servicing, asset
management, investment management, and technology services. GMACCH
has a loan servicing portfolio of approximately US$250 billion. The
Board of Directors of GMACCH will be composed of individuals from the
investor group, GMAC and GMACCH management. Members of the current
GMACCH management team will also invest in the company shortly after
the transaction is completed.
In conjunction with the equity sale, GMACCH will seek to obtain a
standalone credit rating in order to enhance its ability to fund its
operations on an ongoing basis. Under terms of the transaction, the
company will repay all inter-company loans to GMAC upon the closing
of the transaction, thereby providing GMAC significant incremental
liquidity.
"GMAC continues to see exciting growth prospects at its commercial
mortgage operations," said GMAC Chairman Eric Feldstein. "By
partnering with sophisticated and financially strong investors, we
will ensure that adequate capital is available to GMACCH to sustain
its profitable growth. By retaining a 40 percent equity interest,
GMAC will continue to participate in the company's profitability over
the long term."
GMACCH Chief Executive Officer Robert D. Feller said, "The
acquisition of a majority interest in GMAC Commercial Holding Corp.
by this experienced investor group represents an extraordinary
opportunity for us to enhance the value of our enterprise."
KKR, Five Mile Capital Partners, and Goldman Sachs Capital
Partners said in a statement: "We are very pleased to pursue a
transaction with GMAC that will establish a broad foundation on which
GMACCH can realize substantial future growth. GMACCH is one of the
largest providers of commercial mortgage loans and related products
and services in the world, and we look forward to working with
management to expand an already remarkable platform through enhanced
access to the capital markets."
The agreement is subject to regulatory approvals, consents and
other conditions, and is expected to close in the fourth quarter of
this year. The GM and GMAC boards of directors have approved the
transaction.
KKR is one of the world's oldest and most experienced private
equity firms specializing in management buyouts, with offices in New
York, Menlo Park, California and London, England. Over the past
twenty nine years, KKR has invested in more than 130 transactions
with a total value of US$146 billion. For more information, please
visit http://www.kkr.com .
Five Mile Capital Partners ("FMCP") is an alternative investment
management firm established in 2003 with equity capital under
management of US$800 million. The firm was founded by five
professionals, each with over 25 years of experience in all aspects
of mortgage, real estate and asset-backed finance. The partners both
collectively and individually have built a number of leading
financial franchises and participated in creating some of the key
innovations in mortgage and real estate capital markets. For more
information, visit http://www.fivemilecapital.com .
Founded in 1869, Goldman Sachs is one of the oldest and largest
investment banking firms. Goldman Sachs is also a global leader in
private corporate equity and mezzanine investing. Established in
1991, the GS Capital Partners Funds are part of the firm's Principal
Investment Area in the Merchant Banking Division. Goldman Sachs'
Principal Investment Area has formed 11 investment vehicles
aggregating US$26 billion of capital to date. With US$8.5 billion in
committed capital, GS Capital Partners V is the current primary
investment vehicle for Goldman Sachs to make privately negotiated
equity investments. General Motors Acceptance Corporation and its
subsidiaries, operating under the umbrella GMAC Financial Services,
provide  automotive financing, commercial finance, insurance and
mortgage products,  and real estate services, and have a presence in
more than 40 nations. A  wholly owned subsidiary of General Motors
since 1919, GMAC has extended more  than US$1.3 trillion in credit to
finance more than 158 million vehicles.
GMAC Commercial Holding Corp.'s largest operating unit is GMAC
Commercial Mortgage Corporation (GMACCM), a premier financial
services firm that serves the needs of borrowers of commercial real
estate debt as well as the providers of such capital. With a
servicing portfolio of approximately US$250 billion, GMACCM is an
industry leader in loan origination, servicing, asset management,
investment management and technology services. GMACCM provides a
variety of financing products and services, including permanent,
interim, mezzanine and construction lending, as well as equity
capital.
Web site: http://media.gm.com
              http://www.gm.com
              http://www.kkr.com
              http://www.fivemilecapital.com

Contact:

Toni Simonetti of GMAC, +1-212-418-6380, toni.simonetti@gm.com ; Ruth
Pachman, ruth-pachman@kekst.com , or Molly Morse,
molly-morse@kekst.com, of Kekst and Company, +1-212-521-4800, for
KKR; or Andrea Raphael, +1-212-357-0025, for GS Capital Partners
/NOTE TO EDITORS: For additional media information, visit
http://media.gm.com